Cameron's giant leap forward

David Cameron's Conservatives were given their strongest hopes yet of winning the next general election yesterday after Labour suffered a historic national collapse.

Breakthroughs in the North of England and triumphs against the Liberal Democrats in the South delighted the Tories.

Their 40 per cent share of the vote would translate at a general election into a majority of about 20.

But it was a political disaster for Gordon Brown in his own backyard that stunned Westminster, as the SNP ended Labour's 50-year grip on power in Scotland.

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'Back in business in the North': Mr Cameron salutes the Tory win in Chester

Britain moved closer to a constitutional crisis as Scotland put a party committed to the break-up of the Union in charge.

Weeks before he is due to take over from Tony Blair, the Chancellor now faces what some say is an insurmountable task to restore a party which lies in tatters this morning.

The SNP's emergence as the largest party by the slenderest of margins - 47 to Labour's 46 - capped a day of mounting disasters for Labour.

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North and South - a thrashing for Labour

Mr Brown will now have to deal with what is likely to be an unstable minority administration in Edinburgh led by his arch-enemy, the SNP leader Alex Salmond.

"Never again will Labour think it has a divine right to govern," Mr Salmond warned.

The sense of gloom in Scotland was compounded by a voting scandal, as more than five per cent of forms were declared void because of polling errors.

The Electoral Commission announced an urgent inquiry into the failures of a complex new voting system condemned by party leaders as an offence to democracy.

Across the border, things were just as dire for Labour, where it was all but wiped out in southern England.

With results in from 303 councils, the Tories had won 856 new seats and taken control of another 38 authorities, many in areas which for a decade have been hostile to the Tories.

Labour was down 465 councillors, losing control of eight councils.

The Lib Dems lost 243 councillors and five councils.

Outside London, which did not vote, Labour has been all but wiped out in local government south of a line from the Wash to the Severn. Nearly 90 councils have no Labour members.

The Tories still have a mountain to climb in cities such as Manchester and Liverpool, where they still do not have a single councillor.

But in the North West and in Yorkshire they now control more councils than Labour.

Labour narrowly remained the largest party in Wales, but must now spend days of horsetrading to form a minority government.

Its projected share of the national vote stayed at rock bottom on 27 per cent, 13 points behind the Tories who matched the 40 per cent they achieved last year.

Mr Cameron said: "We're the one national party speaking up for all of Britain. I think we can really build from this point, really go forward. The Conservative Party is really where it should be at the moment and I'm very pleased about that."

The Tories became the largest party on England's biggest council, Birmingham, for the first time in almost a quarter of a century and claimed they were "back in business in the North" after seizing councils such as Chester, South Ribble and the East Riding of Yorkshire.

Labour saw Plymouth and Gravesham - two of its few remaining strongholds in the South - fall to the Tories, and lost overall control of Jack Straw's Blackburn with Darwen and David Blunkett's Sheffield, but won North Lincolnshire from Conservatives.

The Lib Dems seized control in John Prescott's fiefdom of Hull and took Eastbourne from the Conservatives, but saw key southern councils Torbay and Bournemouth fall to the Tories.

Mr Blair tried to put a brave face on the results by claiming Labour had avoided a rout. He claimed the Tories still had a long way to go to persuade the country to put them back in Downing Street.

He will seek to draw a line under the fiasco next week by hailing the restoration of devolved power in Northern Ireland before announcing his resignation as Labour leader on Thursday.

But there are growing fears that the drawn-out process to confirm Mr Brown as his successor, which concludes on June 30, could do yet more damage to Labour by putting off the fightback against Mr Cameron.

Home Secretary John Reid said of the Tories: "They are in a much stronger position under David Cameron than they were under Michael Howard, Iain Duncan Smith or William Hague. But that doesn't make them league leaders."

By contrast Mr Brown, who stayed away from the cameras, struck a more humble note as he admitted Labour would have to listen to the voters.

"To all those who came back to Labour - and to everyone throughout Britain - my resolve is that we, the Labour Party, will listen and we will learn."